HOUSTON--(BUSINESS WIRE)--DXP Enterprises, Inc. (NASDAQ: DXPE) today announced the completion of the acquisition of Application Specialties, Inc., a leading distributor of cutting tools, abrasives, coolants and machine shop supplies. DXP funded the acquisition with cash on the balance sheet.
Founded in 1989, ASI is headquartered in Auburn, Washington and operates out of three locations in the state of Washington including Auburn, Everett and Vancouver. ASI is focused on serving customers in the aerospace, construction, medical and firearm markets with approximately 33 employees.
Financial terms of the transaction were not disclosed. Signing of the definitive agreement occurred on January 1, 2018. Sales and adjusted EBITDA were approximately $37 million and $2.9 million, respectively. Adjusted EBITDA was calculated as income before tax, plus interest, depreciation and amortization, and non-recurring items that will not continue after the completion of the acquisition.
David R. Little, Chairman and CEO remarked, “We are pleased to welcome the ASI employees to the DXP team. ASI is a unique, well-run business focused on providing value-added solutions to its customers. ASI will provide DXP’s Metal Working division with new geographic territory and enhance DXP’s end market mix. With ASI, we continue to build on our strategy of providing a breadth of technical products and services on a regional and local level. ASI provides us scale and access to the U.S. Pacific Northwest market, while allowing us to continue to serve our customer's evolving needs. ASI is a great company with key differentiators and provides us with high caliber people.”
“ASI is pleased to be part of the dynamic DXP family. This is a great opportunity for our employees and customers. DXP has a great legacy of growth and we plan to continue that growth. We are excited for the next stage of ASI and helping DXP become a dominant force within cutting tools, the aerospace industry and on the Western side of the United States,” added Mel Whitney, President of ASI.
Kent Yee, CFO added, “We are excited to welcome the talented and hardworking employees of ASI to the DXP team. ASI is our first acquisition in some time and is another exciting addition to DXP. ASI provides us with scale and access into a geographic region we have not historically served. ASI complements and diversifies DXP’s products and end markets. This transaction will be positive for ASI and DXP’s customers, employees and shareholders.”
ASI was advised by Cascadia Capital, LLC.
About DXP Enterprises, Inc.
DXP Enterprises, Inc. is a leading products and service distributor that adds value and total cost savings solutions to industrial customers throughout the United States, Canada, Mexico and Dubai. DXP provides innovative pumping solutions, supply chain services and maintenance, repair, operating and production ("MROP") services that emphasize and utilize DXP’s vast product knowledge and technical expertise in rotating equipment, bearings, power transmission, metal working, industrial supplies and safety products and services. DXP's breadth of MROP products and service solutions allows DXP to be flexible and customer-driven, creating competitive advantages for our customers. DXP’s business segments include Service Centers, Innovative Pumping Solutions and Supply Chain Services. For more information, go to www.dxpe.com.